Arm & Hammer? Rumored royalty hike by Arm could hammer Samsung's Exynos dream
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Several things converged upon Samsung last year that have interfered with the company's attempt to build the 3nm Exynos 2500 application processor (AP) and use it on the upcoming flagship Galaxy S25 series. The first thing, which we've discussed before, is Samsung Foundry's poor yield at 3nm. This would require Samsung to spend more money to obtain the number of expensive silicon wafers it would need to build enough Exynos 2500 chips to supply Galaxy S25 and Galaxy S25+ units everywhere but in the U.S., China, and Canada.
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You might expect that Samsung would be working on fixing Samsung Foundry's yield issues so that the Exynos 2600 AP could be used next year to power the Galaxy S26 and Galaxy S26+ in most markets. But something well beyond Samsung's control is rumored to occur which might force the Korean manufacturer to once again use a Snapdragon chipset on all Galaxy S26 units next year. A report says that Arm is thinking about implementing as much as a 300% hike in the per-chip royalty payments it collects from those who license its Arm v9 architecture.
For its Exynos application processors, Samsung buys Arm's CPU cores, and prices for those cores could rise sharply. While Qualcomm did raise the price of the Snapdragon 8 Elite AP that will be running the entire Galaxy S25 line this year, Samsung might be able to negotiate better pricing for the Snapdragon 8 Elite 2 for next year should it decide to forget about the Exynos 2600. That's because Qualcomm now uses its own custom Oryon CPU cores with its chipsets.
Will Samsung continue building flagship versions of its Exynos chipset? | Image credit-Samsung
Qualcomm still pays Arm to license its instruction set architecture to make sure that the San Diego-based fabless chip designer's semiconductors are compatible with Android, which is an Arm-based software. But any price hike announced by Arm would not impact Qualcomm as much as it would Samsung. The latter used to produce custom cores for its Exynos chipsets; while that could help Samsung with pricing, the company stopped making custom cores in 2020 and there are no signs that it plans on resuming this.
Early last year there was a rumor stating that Samsung and Arm were working on custom versions of Arm's X-series prime CPU cores and its A-series CPU cores starting with 2nm production. But there hasn't been any word about this for some time and there is no clue about when Samsung would start building Exynos APs using a 2nm node.
The combination of horrendously low yields at the 3nm node by Samsung Foundry and Qualcomm's price increase for the Snapdragon 8 Elite just might force Samsung to hike pricing for the Galaxy S25 series this year. Pricing next year for the Galaxy S26 line will depend on whether Arm raises its royalty rates for the Arm v9 architecture and by how much. And if Samsung decides to keep the Exynos 2600 around, a major factor determining the price of the Galaxy S26 series will be how well Samsung Foundry improves its production yield. At this point, it's all a mess.
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